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Alternative Market Briefing

Current low correlations and low volatility are good opportunities for Asian hedge funds

Thursday, June 06, 2013

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Lanny Lim
Benedicte Gravrand, Opalesque Geneva:

An Asian portfolio manager shares his insights on the Asian hedge fund investment landscape in a recent interview with Sona Blessing on Opalesque Radio.

Lanny Lim is a portfolio manager at SAIL Advisors, one of Asia’s leading Global funds of hedge funds managers, with offices in Hong Kong and New York. He has almost two decades of experience in the Asia Pacific capital markets.

According to Lim, hedge funds are a very "applicable" way to invest in Asia, as volatility in the region is usually high.

"Hedge funds in the last ten years have certainly performed as well as the equity market, but also with less than half the volatility," he says.

Over the last six to seven years, there has been no overall correlation between the performance of large hedge funds and their smaller counterparts but size does matter on a case-by case basis, according to SAIL’s research. "At a certain size, hedge funds may experience problems still performing well with the same strategy than they did when they were smaller," Lim explains. So SAIL looks for capacity constraints in each strategy rather than the actual size in the hedge funds. Capacity constraints historically come about when assets under management reach the $600 to $700 million mark, he notes.

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